As reported earlier, home-stay aggregator Airbnb was on the look out for more funds and this latest development seems to confirm that hunch. According to a disclosure filed with the state of Delaware, Airbnb Inc is minting a fresh $850 million in its Series F round of funding.
The 28-page regulatory filing which was first obtained by Equidate, has now been also verified by TechCrunch. There is, however, currently no information on who is making the investment.
Once this round is complete, the company would have tripled its valuation in the past two years. This equity round of funding values the company at about $30 million, which makes it the fourth most-valued tech company in the United States.
The regulatory filing has also disclosed that Airbnb is potentially looking to bring in additional late-stage capital. But the company would now have to be very cautious while adding more money to its coffers. It wouldn’t want to dilute more of its equity in return of hefty cash and return, but more-often follow the route Uber has recently taken to fight its Chinese rival Didi. Uber, the most-valued American startup had recently decided to not further dilute its equity and raise $1.15 billion in the form of leveraged loans. You ask why? Because debt as an asset class is paid before equity.
To support growth, Airbnb has already once followed this strategy to obtained $1 billion in debt facility from some of the largest banks in the U.S. and the company is now taking strategic steps to prolong its IPO. According to WSJ, Airbnb investors are currently planning to launch a buyback program to buy approximately $200 million in stock from employees. Buyback Programs offer more liquidity to employees and are seen as a common practice in late-stage companies who are looking to remain private for a little while longer.
This news, however, also clashes with the fact that the company is currently caught in a legal battle with the New York government, where the legislators have passed a bill that will further restrict apartment listings. It has gone ahead and filed a case against the city of San Francisco for imposing penalties on home rental registration rules drafted by Airbnb.
Founded in 2008 by Brian Chesky, the company was trying to enter a niche category and build an online marketplace that enabled people to list, find, and rent homes in a foreign land. Failing to grasp the nerve of the users thrice gave the company insight into how to pivot their business offering into what it is today. Airbnb now has more than 50 million people around the world who have listed their properties on the platform and serves over 30 million people every year.